The US Empty Container Effect
Dealing with the overwhelming number of empty containers flooding the costal ports of the United States has been harder than anyone could have imagined. The issues these empty containers are creating for the US and the global supply chain cannot be understated. Read on as we discuss these issues and what is being done to improve them.
The Truckers’ Plight
When it comes to transporting containers, truckers are essential. They are the backbone of domestic transportation, and their importance cannot be overlooked. Unfortunately, the trucking industry has been adversely affected by the surplus of empty containers and will continue to be as long as the issue remains.
Large numbers of empty containers severely hurt the productivity of the truckers working with the ports as many of these empty containers are sitting on valuable and needed chassis. Matt Schrap, chief executive of the Harbor Trucking Association recently said, “If chassis are sitting under empties, they can’t be used to pull imports off the dock [and] It also prevents a driver from being dispatched if there is no chassis to dispatch them with or no return location to bring the empty to.”
In the port of New York and New Jersey, truckers are pleading with ocean liners and shippers to help them cover the cost of relocating the vast number of empty containers away from the already congested marine terminals. While the container carriers are offering the truckers payment for moving the empty container to a secondary location, many truckers are complaining that the payment does not compensate them appropriately for the time it takes them. At some of the secondary locations, the truckers are being told to take the empty containers to up to 30 miles away from the port. With congestion, it can take up to a third of the drivers’ working day.
The Value of Empty Containers
Since the beginning of the pandemic, US exporters have been frustrated with container carriers due to the carriers turning away full containers ready to be exported in lieu of empty containers bound for Asia. The carrier’s reason is simple, for containers bound for Asia, empty containers are worth more than laden containers as they allow for a faster turnaround to enjoy skyrocketed west-bound freight rates.
Recently the Panama Canal Authority (PAC) proposed a new toll for ships carrying empty containers being returned to Asia. While this plan would also increase the toll for other types of ships carrying laden containers, it would be the first time the PAC assessed a fee for empty containers.
When asked by an industry news outlet why they decided to make this change a representative of the PAC said the new fee “recognizes the repositioning value of empty containers.”
In hopes of alleviating some of the issues caused by the large number of empty containers flooding the US ports, carriers are issuing more sweeper ships to haul off empties. The sweeper ships aim to help both marine terminals and truckers that are struggling with the seemingly never-ending empty containers.
Since the start of 2022, 36 unladen container ships have called on the ports of Los Angeles and Long Beach to collect empty containers. In comparison, for all of 2021, the ports had 34 unladen vessels call on them for empties.
In some cases, the need to remove empty containers is causing unusual vessel movement. There are reports of ships, after unloading their laden containers in Vancouver, being sent to Southern California for empties before making the return trip to Asia. Ships are also repositioning empties from Southern California to Oakland so they can go out on ships calling there.
Officials in Los Angeles and Long Beach have said that removing empty containers from the port is a priority as they limit the space and workers that could handle laden imports. Thanks to the efforts of sweeper ships, the LA-LB ports have reported, since January, a decrease of empty containers by 27 percent.
Empty containers are just one of the many problems affecting the global supply chain and there’s no way to tell when or if things will go back to the pre-pandemic “normal”. That being said, it’s important to give yourself any advantage you can to help strengthen your business’ supply chain.
Contact the experts at ClearFreight today to learn how our specialized supply chain solutions can give you the advantage you need to make logistics easier for you.